business

Boulder-based Kachi agrees to buy troubled coffee chain Tully's

A Tully's Coffee in Seattle was situated near a Starbucks shop in 1996. (THE SEATTLE TIMES | 1996 file)

Kachi Partners, a Boulder-based private-equity firm, has agreed to buy Tully's Coffee, a troubled Seattle chain, for $4.3 million, The Seattle Times reported.

Tully's, which filed for Chapter 11 bankruptcy protection in October, said the offer was the best chance for the retailer to preserve jobs and keep stores open, the newspaper said.

Tully's chief executive Scott Pearson said in a statement to the newspaper that the agreement puts it in position to emerge from bankruptcy next year as "a much stronger company."

Kachi, which tends to invest in distressed middle-market companies, made the offer before the planned auction of Tully's Coffee by the bankruptcy court.

Tully's, which has closed 19 coffee shops and trimmed its workforce by 85 jobs since the filing, now has 47 corporate-owned locations in Washington and California. Tully's has shops in five Denver-area King Soopers stores.

Kachi, which plans to operate the chain under the Tully's name, is prepared to finalize the sale by Dec. 31. It would pay $1.25 million in cash, and it would assume $1 million in gift-card liabilities and up to $1.6 million in other contract obligations, such as leases.

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